The Detrended Price Oscillator is used when
long-term trends or outliers must be removed from prices or index indicators. This indicator is often used to
supplement a standard price chart. Other indicators can be plotted over the
Detrended Price Oscillator. The Detrended Price Oscillator
("DPO") attempts to eliminate the trend in prices & smoothes the
trend in prices. It compares closing price to a prior moving average,
eliminating cycles longer than the moving average. It is used to isolate
short-term cycles. Short-term cycles add together like musical harmonics to
create longer-term cycles. By studying the shorter-term harmonics of a
long-term cycle, turning points in the major cycle can be determined. The DPO
removes the longer-term cycles from prices, making the shorter-term cycles more
visible. The Detrended Price Oscillator is most effective with indicator
periods of 21 or less.

Detrended
prices allow to more easily identifying cycles and overbought/oversold levels.
Short- term cycles add together to create longer-term cycles. Analyzing these
shorter-term components of the long-term cycles can be helpful in identifying
major turning points in the longer-term cycle. The DPO helps to remove these
longer-term cycles from prices.

Use of this Site is subject to express Terms of Use. By using this Site, you signify that you agree to be bound by these
Terms of Use.Copyright 2013 vogaz. All rights reserved. Reproduction of News, Articles, Photos, Videos or any other content in whole or in part in any form or medium without express written permission of
www.vogaz.com is prohibited.